Cover Image

Not for Sale

View/Hide Left Panel
Click for next page ( 8

The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement

Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 7
Airline Agreements 7 vious month. The time period generally varies between 5 and 15 days; however, there is a trend toward requiring the submission of reports within 5 days of the previous month's end. Most airports require airlines to include the passenger activity of affiliates in their passenger activity reports. Most airports permit the affiliate to file their own landed weight report. This will depend on the agreement's language regarding the treatment of affiliates (see Section 1.5). Most agreements specify the format of the reports to be submitted and provide the form as an exhibit to the agreement. The report can be submitted either as a hard copy or electronically via email. However, there is a trend in the industry, as technology expands, to require reporting air- line activity via an airport-proprietary electronic system. Many airports have or are considering new electronic systems for activity reporting. See CRP-CD-81 (enclosed herein), Appendix to Chapter 1, Airline Agreements, for excerpts from the PDX, STL, and SEA Airline Agreements for provisions regarding activity reports and information to be provided by airlines. 1.12 Form and Amount of Payment Security Airline agreements generally take one of four approaches to the issue of payment security: No payment security is required in the agreement. These agreements do not specifically waive the requirement, but rather are silent on the subject. This exclusion would be found in a resid- ual agreement where the airport can recover the bad debt through the rates charged to other airlines. For this reason, frequently in an airport/airline negotiation, the more financially sta- ble airlines would request a payment security provision in order to minimize their risk of pay- ing the costs of a bankrupt or defaulting airline. An absolute payment security is required. These agreements have a requirement for payment security from the airline regardless of the airline's payment history or good standing status. See CRP-CD-81 (enclosed herein), Appendix to Chapter 1, Airline Agreements, for excerpts from the SEA Airline Agreement for provisions regarding the security deposit requirements. There is a slight variation on this approach in some airports where the rate making method- ology is different in the various cost centers. For example, BWI requires payment security in compensatory cost centers only (terminal and loading bridges). See CRP-CD-81 (enclosed herein), Appendix to Chapter 1, Airline Agreements, for excerpts from the BWI Airline Agreement for provisions regarding performance bond requirements. A form of payment security is required if the airline has not previously served the airport, has not served the airport for a specified period of time (ranges from 12 to 24 months) or has been late in making required payments. See CRP-CD-81 (enclosed herein), Appendix to Chapter 1, Airline Agreements, for excerpts from the PDX, PIT, and MWAA Airline Agreements for provisions regarding security deposits to be provided by airlines. The form of payment security is generally specified as a performance or contract bond or a letter of credit, with general language allowing any other form approved by the airport. Some airports accept cash deposits but that is uncommon. The amount of the payment security is generally 3 to 4 months' of rents, other charges, and landing fees. Some agreements require the bond amount to be updated annually or upon an increase in an airline's fees or if the security is depleted. Many agreements do not require the air- port to escrow or pay interest on the payment security; others specifically exclude that require- ment, as also evidenced in the SEA agreement.